F1 teams reject chance to buy shares, but Carey happy with talks

Motor racing - 25 Jul 2017

Author: Simon Ward

None of the Formula 1 teams have taken up the offer from the sport’s new owner Liberty Media to acquire shares in the business.

However, Formula 1 chairman and chief executive Chase Carey has insisted that this does not imply that the teams are dissatisfied with the running of the sport, adding that “collaborative discussions” are continuing.

When Liberty acquired Formula 1 in an $8-billion deal in
January, chief executive Greg Maffei announced that it had offered around 19
million shares in the sport to the 10 participating teams at a preferential
rate, making them worth around $400 million in total.

However, the six-month deadline passed on 23 July without
any of the teams pursuing the opportunity.

It was reported in March that Ferrari had directly acquired
shares from Liberty, although this turned out to be the allocation the Italian
team was entitled to when it sold its 0.25-per-cent stake in the sport, and not
part of the offering of 19 million shares.

In a statement today, Liberty said “the investment opportunity offered to Formula 1 teams to purchase up to approximately 19 million shares of Series C Formula One common stock (‘FWONK’) has expired.

“The Formula 1 teams were offered the opportunity to invest at a per share purchase price of $21.26 at the time of Liberty’s acquisition of Delta Topco Limited, the parent company of Formula 1, on January 23, 2017, and subject to a six-month investment review process.”

Liberty added that the shares have now been “retired,” but that it “retains the right to offer future investment opportunities to Formula 1 teams.”

It is thought that the teams were reluctant to invest without receiving any voting rights, especially as the existing Concorde Agreement which binds them to Formula 1 expires in 2020 and there is uncertainty about the landscape beyond that year.

Liberty is looking to enact various changes in the sport, with the prospect of more city-based street races and digital coverage, to attract new audiences and sponsors, and Carey stressed that relations with the teams are good.

He said today: “We have been actively engaged with all teams to shape a shared vision for the sport that will create real value for all stakeholders.

“While the window for this particular investment opportunity has passed, we are pleased with the collaborative discussions we are having with the teams. These discussions will take time, but we appreciate their receptivity towards further aligning our incentives for the long-term benefit of the sport.”